Ex-spouse was entitled to intervene in "innocent spouse" suit.

• Author: Fiore, Nicholas J.
• Position: Tax liability

F was previously married to K, and he and Killed a joint return for 1993. Although F is not a petitioner in this case, he objects to K's claim for relief from joint liability.

During 1993, K and F were married to each other. They separated sometime during 1993 and, in May 1995, they divorced. Their joint Federal income tax return for 1993 reported a net loss from farming. The IRS disallowed this loss on the ground that the farming activity was not for profit. In 1996, the Service issued separate deficiency notices to K and F. K filed a timely petition, but F did not. The IRS assessed the deficiency against F. F has not paid any portion of the assessment, nor has he challenged the assessment in any other court.

K has not challenged the disallowed farming activity loss. K only claimed that she is entitled to relief from joint liability. In 1998, Congress passed the Internal Revenue Service Restructuring and Reform Act of 1998; included was Sec. 6015, expanding relief for "innocent spouses." Moreover, Sec. 6015 was retroactive, applicable to any liability for tax arising after July 22,1998 and to any liability for tax arising on or before such date that remained unpaid as of July 22, 1998. Following the change in the applicable law, the Service concluded that K qualified for innocent spouse relief under Sec. 6015(b). The IRS further stated that F objected to such relief and that he should be provided with adequate notice and an opportunity to become a party to the proceeding under Sec. 6015(e)(4).

The issue is whether a spouse (or former spouse), who is not a petitioner, may intervene and become a party in a deficiency case in which the other spouse (or former spouse) is a petitioner claiming relief from joint liability under Sec. 6015. Previously, one spouse has been allowed to challenge the other spouse's claim for relief under Sec. 6015 when both spouses were before the court as petitioners in the same deficiency case; see Corson, 114 TC 354 (2000).

In the instant case, the...